Combined rate and how to defer it in Tennessee.
Tennessee imposes no state income tax on capital gains, leaving investment property sellers with only the federal rate: up to 23.8% (20% federal + 3.8% NIIT, 0% state). Tennessee fully phased out its Hall Tax on investment income in 2021.
Tennessee has no state income tax on capital gains. Your capital gains exposure on investment property is federal only. Estimate the federal bill with depreciation recapture using the capital gains tax calculator.
A 1031 like-kind exchange defers the full 23.8% federal rate by reinvesting all proceeds into a replacement property. Model the numbers in the 1031 exchange calculator and get your deadline dates from the timeline calculator.